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7 things every environmental entrepreneur should know

A lot is happening at the intersection of environmentalism and entrepreneurship these days, and it’s creating a hybrid form: the environmental entrepreneur. Some are coming from the entrepreneurial community. Many more are environmentally driven and, realizing that “commerce is the engine of change,” are starting new ventures. Here’s some quick advice based on having a front row seat at the intersection for the past few years.

Solve the right problem first.
That problem has to be the customer’s. Your project will, by definition, benefit the environment and coming generations (you’re an environmental entrepreneur, right?). But if it doesn’t also benefit the people who have to pay for it in the first place, it will die. If the first slide in your presentation doesn’t clearly describe a living customer and a real pain they are feeling now (and you could solve), then you’re not ready. Don’t lead with global warming, greenhouse gas emissions, or wetland protection unless you’re talking to the people who feel this pain directly (like foundations and policy makers). Instead, talk about how your solution will help the customer–help grow market share, reduce costs, improve quality, increase margins, reduce weight, grow hair, or get their kids into Princeton. Solving the customer’s problem first focuses you on the here and now, forcing you to be the one person who understands better than even your customers, what they need.

Always solve more than 1 problem. Good ideas solve someone’s problem. Great ideas solve more than one problem. Don’t waste your time pushing one-dimensional solutions, the successful ventures, green or otherwise, that you hear about solve multiple problems at once. That means solving the problems of suppliers, distributors, retailers, and regulators, and investors. Powerlight developed a solar panel system that clicks together, has a layer of insulation underneath, doesn’t require penetrating the existing roof, and is durable enough to walk on. This reduces the efficiency of their panels (as they don’t tilt toward the sun) but it makes installation easy, and installers recommend them. Whose cooperation do you need? What do they get out of the deal? Run the numbers. If everyone doesn’t win, go back to the drawing board until you find a solution where everyone does.

Embrace style. Somewhere along the way, style became the antithesis of substance. Nearly 100 years of Madison Avenue advertising has made style a cheap substitute for substance (just look at the US auto industry). But you can’t blame them. Consumption is as much about identity as it is about performance. Nike, Coca-Cola, Apple, and Chevy all sell identity as much as the products their names are on. The Prius was helped by images of celebrities filling the gas tank; Willy Nelson’s name scored style points for biodeisel among truckers; even Gore is revamping his style to great effect. Think about your new venture: Style has a substance all its own. What’s yours? What’s your company’s identity and who wants to share it with you?

Don’t make leaps.
Most environmental entrepreneurs have visions of fixing entire systems–after all, that’s what’s broken–and design solutions that promise wholly new technologies enabling (and requiring) wholly new behaviors. Think hydrogen fuel cell vehicles, which require innovations in fuel cells, fuel, fueling stations, fuel companies, and fuel distributors, to mention just a few. But that’s where most promising ideas fail. Innovations succeed when they offer evolutionary, not revolutionary, changes in behavior. Create a design that provides small steps, easy changes, for your customers. Edison designed his electric light to look and act just like the gas lighting existing customers were used to. Only later did people start using electricity for other uses. Natura non facit saltum: Nature does not make leaps. Neither will customers.

Know when good enough is good enough. You will always have two choices: keep working on the product or get it into the hands of customers and see what happens. Hundreds of millions have been poured into perfecting the Hydrogen fuel cell vehicle, all based on what people think the automobile industry will want in 15-20 years. Jadoo Power Systems, on the other hand, found a way to put hydrogen fuel cells into the hands of customers today. How? By taking the technology that exists today and designing products that people need now. Jadoo sells power solutions to video crews, rescue workers, and the military–all of whom will pay right now for something than provides the same power for less weight. And by doing so, they are learning dramatically (doubling performance while halfing costs). Get to the market as soon as you can–there is no substitute for learning what people will pay for, and how they’ll actually use it.

Forget the better mousetrap. Emerson had it wrong. Build a better mousetrap and the world will not beat a path to your door. The better mousetrap–or whatever your solution–is the beginning, not the end. Once you have that, you need to market it. You need to get the word out to your customers quickly and effectively by building a website, sending out a press release, writing an editorial (or better yet, an article describing the problem, the market, and the opportunity better than anyone else has yet). Who needs to know about your product? How are they going to hear about it? How can they reach you? The light bulb was 40 years old by the time Edison started marketing his version. The steam engine was over 100 years old before James Watt found the investors, distribution channels, and manufacturing partners to bring it to the mass market. We remember Edison and Watt because they built successful business around existing mousetraps.

Remember, success makes you the new problem. Careful what you wish for–you just might get it. Any company that succeeds grows, and any company that grows needs to worry about managing cash-flow, making payroll, paying creditors, and staying around in the long-term. Compromises start to creep in, waste starts to add up, and pretty soon you’re part of the problem. For environmental companies, this is especially challenging. A world filled with electric cars would be a world littered with lead-acid batteries and darkened by coal-burning power plants. Look to companies who, like Patagonia in the last decade or Hewlett-Packard in the 1950s, turned away from growth in order to remain the companies they wanted to be in the first place. Just remember, when you succeed, why you started in the first place.